Public-private consortium weighs ¥200 billion investment in Renesas

A public-private consortium including Innovation Network Corp. of Japan, Toyota Motor Corp. and Panasonic Corp. is considering investing some ¥200 billion in flailing chip-maker Renesas, according to sources.

The sum is double the offer of ¥100 billion that U.S. investment fund Kohlberg Kravis Roberts & Co. made to Renesas Electronics Corp. in late August. With the fund believed to be cautious about increasing its offer, the consortium is likely to take the initiative in rehabilitating the manufacturer, the sources said.

Members of the consortium are in final stages of talks on their bailout plan, hoping to complete the acquisition of Renesas by the end of the year. Of the ¥200 billion, INCJ will put up ¥150 billion and the rest will be shouldered by Toyota, Panasonic and other major manufacturers, they added.

By reinforcing Renesas’ capital base, the consortium is hoping to ensure a stable supply of microcontrollers, a key semiconductor used in automobiles and consumer electronics, to domestic manufacturers, as the chip-maker holds the biggest share of the global market for the product.

The consortium members will shortly present their investment plan to Renesas’ three leading shareholders — NEC Corp., Hitachi Ltd. and Mitsubishi Electric Corp. — as well as the Bank of Tokyo-Mitsubishi UFJ and Mizuho Corporate Bank, the sources said.

In addition to Toyota and Panasonic, private-sector members of the consortium will include Honda Motor Co., Nissan Motor Co., Canon Inc., major auto parts maker Denso Corp., Keihin Corp. and industrial robot maker Fanuc Ltd., according to the sources.

Domestic carmakers and electronics producers decided to team up with INCJ after growing concerned that Kohlberg Kravis Roberts might drastically restructure Renesas if its offer is accepted, a development that could seriously impact their procurement of microcontrollers.

Aozora reshuffles posts

Aozora Bank said Thursday that it has appointed Deputy President Shinsuke Baba, 58, to replace Brian Prince as president and chief executive officer.

Prince, 48, will succeed Yuji Shirakawa, 76, as chairman and will remain as representative director, while Shirakawa will stay as director, the bank said.

Aozora Bank also said U.S. private equity firm Cerberus, the top shareholder of the bank with 49.7 percent voting rights, has informed the bank of its intention to sell some of the shareholdings.

The bank has drawn up a plan to buy back its preferred shares held by the government to repay public money that has been injected in the bank for capital replenishment.